Legal Issues for App Developers

Last month at its WWDC2012 event, Apple’s CEO, Tim Cook, announced that more than 650,000 apps are now available to App Store customers and, since its launch, over 30 billion apps have been downloaded. In addition to this, more than 10 billion apps have been downloaded for Android mobile devices and the number of apps coming onto the market is growing at a staggering rate.

It is estimated that within the next four years, more people will connect to the internet via a mobile device, such as a smart phone or tablet, than via a traditional computer. With this in mind, more and more companies are scrambling to develop their own apps to take advantage of this rise in popularity and to avoid being left behind as competitors vie for users’ attention. However, if you’re serious about app development there are a number of issues which should be borne in mind:

Who owns the app?

The general rule is that copyright in the app software will be owned by its author from the moment he or she writes the code. The main exception to this is where the code is written by an employee in the course of their employment, in which case the employer will be the first owner of the copyright. Where the ownership of copyright may become a concern is where you outsource the development of your app to a third party.

Where work is commissioned from a developer, the developer will generally own the copyright even though the commissioner of the work has paid for the work to be done. It is therefore essential when engaging a developer to deal with the position on copyright up front in order to avoid potential problems later, ideally by the commissioner by taking an assignment of all present and future rights in any work created by the developer for the commissioner.

In addition, where your app is for a new concept, it is important that the developer enters into a non-disclosure agreement with you to ensure strict confidentiality while your app is being developed.

Other ways to protect your IP

In addition to ensuring that you own the copyright in your app, trade mark registration should be considered as an additional step to protect your intellectual property rights.

A trade mark is any word, name, symbol, or device, or any combination thereof, that identifies to customers the source of a product, and enables a trade mark owner to distinguish their products from products manufactured or sold by others.

Registering your trade mark gives you the exclusive right to use your mark for the goods and/or services that it covers in the UK. A registered trade mark has a number of benefits:

it makes it easier for you to take legal action against anyone who uses your trade mark without your permission;

it may deter others from using your trade mark without permission; and

it makes the trade mark your property which means that you can sell it, franchise it or let other people have a licence that allows them to use it in exchange for a fee.

As your trade mark will be used to distinguish your goods and services from those of your competitors it is important that it is distinctive. The Intellectual Property Office will not accept marks for registration which:

describe the goods or services or any characteristics of them e.g. “Cornish Clotted Cream” for cream;

have become customary in the relevant line of trade e.g. “China Garden” for Chinese restaurant services;

are not distinctive e.g. “The Cheese Company” for cheese.

Even if you decide not to apply for a trade mark for your app, a trade mark search should still be carried out to avoid inadvertent infringement of pre-existing trade marks as a number of apps have been removed from the App Store on the basis of alleged trade mark infringement.

Don’t infringe someone else’s IP

The development of an app using someone else’s work could infringe copyright or other IP rights. For instance, if the development includes aspects of another person’s software or coding, it will be necessary to ensure that a license is obtained from the owner of that work to prevent infringement of the owner’s IP rights.

A developer should never knowingly copy another app or use third party software without a license from the owner and if open source software is used in the development of an app, care must be taken to ensure that any conditions of use are complied with. If you are commissioning a developer to create your app, you should ensure that these issues are covered in the development agreement.

It is also important to have the necessary licenses in place if your app uses copyright protected content such as images, videos, and sound recordings of others.

Be aware of the contract issues

Once the app has been accepted for use on a mobile device it will be subject to certain terms and conditions, such as Apple’s “iSO Developer Program License Agreement” and “Mac Developer Program License Agreement”. These documents set out the provisions governing the operation and marketing of the app and may include obligations relating to content, privacy and ongoing support. Careful consideration should be given to these terms and conditions to ensure that the app is fully compliant, as a failure to comply could result in complaints from users or the app being removed by the platform operator.

Exercise caution when tying your app to another platform

If you decide to tie you app to a third-party platform such as Facebook, Twitter or Google Maps you expose the success of your app to the actions of that other party. If there is a problem with their platform then your app will suffer and, more concerning, they can very easily block your access to their APIs and modify their terms of use. If your app is not clearly allowed by the platform’s terms of use or if you have concerns about how future changes to their product could affect your app, you should consider approaching the provider and having an open dialogue with them before expending time and resources on building an app that could be shut down or crippled after launch.

Minimise the risks of liability for user-added content

If your app allows for user contribution, then it is important to consider how to minimise your liability for user-added content which is defamatory, infringing or otherwise unlawful. One important decision is whether and how to moderate user-added content. The main choices are: (i) do not moderate content; (ii) check all content before it appears; or (iii) review all content after it appears. Regardless of which option is chosen it is important to have a robust takedown policy in place.

The most common choice is for content to be unmoderated. This makes it difficult to control the quality of material posted, but the legal advantage is that it is easier to avoid liability for anything that is defamatory, infringing or otherwise unlawful as by not undertaking to moderate the app or website the operator is not assuming responsibility for the material that appears. The only condition is that the operator provides a process for removing offending content expeditiously upon being made aware of it.

The process for the removal of content will usually involve a clear, easy-to-use facility on the app or website by which users can report inappropriate content to the operator (such a link for users to “Report Abuse”, “Complain about this content” or “Flag as inappropriate”). The operator should also have clear internal process for dealing with any complaints received.

Consider jurisdictional issues

While the information set out above has been provided from an English law perspective, app developers will need to consider and comply with laws in other countries where the app is being marketed and distributed. The cross-border nature of the internet means that an app which is lawfully developed in one country could infringe a third party’s IP rights in other countries in which it is downloaded and used. Also, consumer protection and data protection laws in England differ from those in the other countries such as those in mainland Europe and the US and those countries might have tighter restrictions. If your app is being marketing or distributed outside of the UK, legal advice should be sort from lawyers or other experts in those countries.

Conclusion

While it is not possible to predict every potential legal issue that an app developer may face, the most common pitfalls can easily be avoided. Implementing a proactive legal compliance strategy during the early part of the development process will help to minimise the legal risk and strengthen the protection of the IP rights in your app.